Against the euro the pound dipped around 0.1% to 1.262 euros
The FTSE 100 has closed at its lowest point since July last year, marking another choppy day for London’s top index.
It remained below the 7,000 mark throughout the day (Thursday) and took a hit in late afternoon trading, ending 128.3 points lower, or 1.77%, at 6,881.59.
It came a day after the Bank of England took emergency action by unveiling a bond-buying programme aimed at stemming spiralling gilt yields and preventing pension funds from collapsing.
The move seemed to briefly soothe investors’ concerns and the FTSE 100 stabilised while the pound managed to recover losses from earlier in the day.
But it plunged back on Thursday after the Prime Minister stood by the Government’s controversial fiscal policy decisions, followed by similar comments from the Chancellor.
Sterling was on much stronger territory on Thursday, floating well above 1.08 against the US dollar and hitting around 1.1033 dollars when European markets closed.
Against the euro the pound dipped around 0.1% to 1.262 euros.
Fawad Razaqzada, a market analyst at City Index and Forex.com, said: The Bank of England’s intervention has calmed the bond markets somewhat, with yields coming down not just in the UK but the eurozone and US too.
As a result, we are seeing bearish speculators eased off the gas a little, and this is providing some relief for beaten-down currencies such as the euro and other risk assets, he said.
Other European markets were also in the red, with the German Dax declining 1.71% and the French Cac falling 1.5%.
There was no relief in the US as the S&P 500 had dropped 1.8% and the Dow Jones by 1.26% when European markets closed.
